CPS Technologies Corp (CPSH) 2021 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the CPS Technologies Corp. 2021 Year-End Investor Call. (Operator Instructions) I would like to hand over the conference to your speaker, Mr. Chuck Griffith, sir, you may begin.

Thank you, Jeff, and good afternoon, everybody. I'm joined today by Michael McCormack, our President and Chief Executive Officer, who will offer his comments on our fourth quarter and annual results.

Before we begin the business portion of the call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered as subject to the many uncertainties that exist in CPS' operations and environment. These uncertainties include the impact of COVID-19, the Russian invasion of Ukraine, economic conditions, market demands and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statements.

Now I'll turn the call over to Michael to offer his perspectives on the year and fourth quarter results.

Thank you, Chuck, and good afternoon, everybody. Thank you for joining us. Today, we are pleased to announce the fourth quarter revenues of $6.2 million and an operating profit of $312,000 for the quarter ending December 25, 2021. This compares favorably with revenues of $4.2 million and an operating loss of $291,000 for the same quarter a year ago ending December 26, 2020.

The financial results in the fourth quarter were anticipated based upon the proactive restructuring steps we executed in the third quarter and marked our best overall quarterly performance since the pandemic began. We believe this past quarterly performance is more indicative of our near-term outlook of the business. The nearly 50% growth in revenue as compared to the same quarter a year ago is extremely noteworthy as well as the 13% increase from the third to fourth quarter results. We are demonstrating continued incremental improvement because of the changes we are implementing to create inherent value and generate greater revenue and operating income and deliver shareholder value.

For the fiscal year, we are reporting revenues of $22.5 million as compared to revenues of $20.9 million in fiscal year '20. The 7.5% annual organic growth rate over the fiscal year is consistent with our strategy. Fiscal year '21 reflects the second highest year ever in terms of revenue for the company.

For the fiscal year, we are reporting $513,000 in operating income, the company is also reporting net income of $3.2 million in 2021 versus $914,000 in fiscal year '20. This increase is due to the reversal of company's deferral tax reserve. In addition, this also marks our second consecutive year of profitability. Our book-to-bill of 1.67 to 1 for the fiscal year 2021 continues to reaffirm our growth strategy is translating into results over a larger sample of data. We are cautiously optimistic that the increased sales of fiscal year '21 will directly translate into steadily increasing revenue in fiscal year '22.

COVID is still omnipresent. We are continuing to monitor all aspects of our supply chain and remain vigilant on ensuring availability of raw goods to create and deliver products to our customers. The variability of our entire chain has been challenged since the pandemic outbreak nearly 2 years ago. We are confident, we have multiple plans in place to control the issues we can control.

I'll speak a little bit later more about the overall business progress moving forward on the call. But for now, I'll turn it over to Chuck, and he'll discuss the financial details in a little bit more detail. Chuck?

Thank you, Michael. So revenues totaled $6.2 million in Q4 2021 compared to $4.2 million generated in Q4 2020. So an actual increase of 48%. This increase was due primarily to the increase in sales for armor and hermetic packages in the fourth quarter of 2021 as well as the impact of COVID-19 -- of the COVID-19 pandemic on sales in the fourth quarter of 2020.

Gross margin in Q4 '21 totaled $1.4 million or 22% of sales. This compares with gross margin in Q4 '20 of $0.5 million at 12% of sales. This increase in margin dollars directly correlates to the increase in revenue between the 2 periods. Selling, general and administrative expenses totaled $1.0 million in Q4 '21 compared with SG&A expenses of $789,000 in Q4 2020. This increase was due to the increase in sales employees, total compensation expense and to an increase in commission expense due to the higher sales volume.

The company experienced operating income of $312,000 in Q4 '21 compared to an operating loss of $291,000 in Q4 2020. This increase in operating income is due primarily to the increase in revenue, as we previously discussed. For the year ended December 25, '21, revenues totaled $22.4 million compared to $20.9 million in 2020, an increase of 8%. This increase was due primarily to the increase in sales for armor and hermetic packages in 2021.

Gross margin in 2021 totaled $4.8 million or 21% of sales, this compares with gross margin in 2020 of $4.2 million, which was 20% of sales. The increase in margin dollars is directly correlated to the increase in revenue. Selling, general and administrative expenses totaled $4.3 million in 2021. This compares to SG&A expenses of $3.3 million in 2020.

Several factors contributed to this increase. The company incurred an expense of an excess of $300,000 for onetime restructuring costs in 2021, the company paid the salaries and benefits for both our retired CEO and our new CEO during the first half of '21, they were both here at the same time, adding about $100,000 to our SG&A expenses. And we also added 3 new sales positions in 2021, which contribute to our overall increase in compensation.

The company experienced operating income of $513,000 in 2021 compared to operating income of $914,000 in 2020, and the decrease was due primarily to the increase in SG&A expenses as we previously discussed. The company recorded net income of $3.2 million in 2021 compared to $900,000 in 2020, and this increase is primarily due to the reversal of the company's deferred tax reserve.

In December of 2018, the company set up a valuation reserve against its deferred tax asset. At that time, following a period of sustained losses, management determined that it was more likely than not that this tax asset would not be used. Management has reevaluated this decision in light of recent profitability and expected future profitability and has determined that it is more likely than not that the company will be able to fully utilize this tax asset. As such, a tax benefit of $2.7 million has been recorded on the income statement as of December 25, 2021.

Turning to the balance sheet. We ended the quarter with $5 million of cash. This is an improvement to our cash position of $195,000 at the end of 2020. In May, we completed our at-the-market filing and began raising funds over that program. Through the end of the year, we raised approximately $3.4 million net under the ATM offering. These funds have enabled us to completely cease borrowing under our bank line of credit.

In addition, we have been able to absorb the increases in accounts receivable as our sales grow and in inventory as we develop our armor line. Our raise under this offering is being managed such that we've covered our short-term cash needs. We've become more selective regarding the days and market prices at which we will sell additional shares. As such, no additional cash was raised during the fourth quarter under the ATM program.

Accounts receivable at December 25, 2021, totaled $4.9 million compared with $2.9 million at the end of December 26, 2020. Our days sales outstanding totaled 72 days at the end of the quarter compared to 62 days for the prior year. This increase was due to the inclusion of about $600,000 of deferred revenue in the 2021 year-end accounts receivable. If we take that amount out, then the days sales outstanding at the end of 2021 would have been 63 days, which is in line with previous years.

Inventories totaled $3.9 million at the end of December compared -- 2021 compared with $3.7 million at the end of December 2020. This increase in inventory is due to increased armor materials offset by better management of inventory in other product lines. Improved inventory management is now an area of focus. The inventory turnover in the most recent 4 quarters was 4.7x compared to 4.5x for the period ended December 26, 2020.

Turning to the liability side. Payables and accruals totaled $2.8 million at December 25, 2021, up from $1.8 million at December 26, 2020. This is due to greater expenditures resulting from higher sales levels as well as the accrued restructuring charges, which we had previously discussed.

So for further discussion, I'd like to turn the call back over to Michael. You're on.

Thank you, Chuck. This past quarter and fiscal year, we continue to make positive, measurable progress on streamlining and improving current operations, while also simultaneously addressing our long-term goal to grow to a sustained medium-sized business.

As an organization, we are completely focused on increasing our ability to add sales and improve our ability to execute. We have substantially rebranded the company and improved our web, social media and digital presence. We are now able to reach more potential customers, investors and potential new employees about our ability to supply innovative, custom-made, materials-based solutions to solve our customers' most challenging issues.

We have also continued to add additional staff members that will enable us to scale the size of the business without significantly adding cost as we execute. We have hired more engineers, more sales staff and shared service members to name a few position.

I would like to take a moment to discuss our approach to increasing our overall technical bandwidth, growing our approach to product innovation. We are adding technical staff to address the growing demand of our products across all 3 product lines. hermetic packaging, armor and the metal matrix composite business. Our engineers are working with the business development staff to develop solutions that specifically address customers' requirements while working predominantly in a funding-constrained environment. This is directly equating to the addition of new customers, especially in the RF microwave market segment. Most importantly, this is bringing about a renewed interest in our industry-only AlSiC hermetic package.

I'm quite pleased with the progress we are making. We have reenergized the contract research and development services business, as evidenced by our participation in the small business innovative research and the small business technology transfer programs. The SBIR and STTR programs are the large reason for most recent success of a HybridTech Armor program line with the United States Navy. These programs are highly competitive awards that encourage domestic small businesses to engage in federal research and development programs with the potential for commercialization.

In addition, as these programs advance through the research and development or R&D to commercialization, they are afforded additional intellectual property protections and sole source manufacturing rights within the U.S. federal government.

We have recently been awarded an exciting research and development contract with the U.S. Army aviation community to address their thermal management concerns for Future Vertical Lift programs, or FVL as they call them. The FVL program is a plan to develop and replace the current utility, attack, cargo and reconnaissance helicopters in the entire U.S. armed forces. Although the program is just beginning, we are immensely proud of our engineering staff to propose a novel solution that our military [proposal is valued] over several potential solutions, including numerous prestigious academic institutions to help dissipate heat over large areas for critical aviation applications.

I'd like to specifically mention the magnificent work of Dr. Steve Kachur, Dr. Mark Occhionero and Mr. Bill Holmes in this endeavor. We are also awaiting notification on several other contract research and development opportunities within both the Department of Energy and the Department of Defense.

As we look beyond fiscal year 2021 now, CPS is continuing to follow up on the success of the past quarters with improving production volumes. We have made a commitment to a new material resource planning, MRP, tool in conjunction with our new enterprise resource planning tool, ERP, to enhance the efficiency and profitability of the entire operation. We hope to have this conversion done before the end of this fiscal year.

The future is extremely bright at CPS, and I'm not just saying that because I'm the CEO. We have several large-scale future opportunities in all 3 of our product lines, hermetic packaging, armor and metal matrix composites. These opportunities are significant also within the markets we are focusing on, aerospace and defense and commercial consumer electronics. The entire staff is working towards the growth and product offerings while improving profitability.

We are quite pleased with our recent quarterly performance and expect that we will continually and incrementally improve as we move forward quarter-to-quarter and year-over-year. We are aware of the unpredictability of the COVID pandemic, but also hopefully as the year progress and the potential impacts to the business will continue to be less and less. The impact of the unprovoked Russian invasion of Ukraine should have negligible impact on CPS as we've had almost no sales in those countries. We have lots of additional opportunities today, both small and large, that keep the entire staff focused on finding the ideal, innovative material solution for customers' needs.

And with that, I'd like to take a moment so that Chuck and I are prepared to answer any questions there may be about the business, whether it be fiscal year '21 or the last quarter, and we're opening...

Open to questions.

(Operator Instructions) We have a question from the line of Stephen (inaudible).

Sort of a general question, can you say roughly how your business breaks out between, say, defense and national security and other applications and perhaps where you have visibility on where that's going?

Yes. So I think that -- I think we have something on that in our 10-K, which obviously we haven't published yet. But I want to say that defense is in the neighborhood of 25% of the business for 2021. And we do think it's going to continue to grow. But for last year's numbers, it's in that range.

Okay. Good. That kind of sort of gives me a good sense. It looks like it's probably -- unfortunately, a general growth area at the moment.

(Operator Instructions) There are no further questions at this time, please continue -- we have one, [Greg Weber].

Just curious, could you speak to operating leverage? I mean, you had nice, great top line and nice gross margins, but depending on earnings. So could you talk a little bit about what we should expect there on a go-forward basis?

In terms of -- what are you -- can you just repeat the question?

So you had very good revenues. Gross margins are back up into the low 20s again. And yet, we earned $0.01 a share. So I'm trying to -- what should I think about is the OpEx situation. It sounds like you're making some improvements there. We need more top line, did we get more earnings? Or what's the thought...

Yes, we definitely expect more earnings. I think that as we talked about that SG&A number for this year included quite a bit of expense that is onetime due to the change in leadership and some of the other changes that we've made during -- mainly during the third quarter. But those -- as I said, those are onetime deals. And I think that we should -- we would have seen an increase in earnings over -- all other things being equal, we would have seen an increase in earnings over the year have we not had to incur those expenses. So I do think we'll see much better earnings going forward than we did, especially in the first couple of quarters -- first 3 quarters of 2021.

Okay. And maybe just a follow-on there. In terms of gross margins, what should we think about there going forward? You're obviously doing a lot to try to streamline operations, which should help, I assume, margins. But just due to product mix or whatever, any color there? Is there more gas in the tank here beyond '22 you just put up?

Well, this is Michael, Greg. Certainly, it's a focus of ours. We continue to have issues that I'm very proud that we're continuing to improve the gross margin because, as you know, there's been quite a bit of inflation going on. And it's been a little hectic as they -- which we can keep our cost controlled and how do we control those costs, improve margin and also keep happy customers.

So it has been a bit of a dynamic this -- I guess, the second part of the year as the inflation has really taken hold in the supply chain. But I think for the most part, we've overcome that. We're earning a little bit better. Like I think that overall, we slightly improved. But we did have quite a few gremlins there we had to battle. I think as we move forward, as the mix begins to improve a little bit, we anticipate continued progress.

Okay. Great. And you're definitely not willing on that front in terms of input cost inflation. So are there any escalators in your contracts? Or you got to go back basically and start to raise prices separately?

Well, that's always a difficult issue. So some of our contracts are extremely long with our customers, and there are different provisions in each of those to address these, whether it's the annual repricing, surcharge pass-throughs, et cetera, et cetera. So each of them are kind of unique, I guess, Greg.

Next question is from the line of Patrick White.

Congratulations on a fine year and a fine quarter, and glad to see all the progress you guys are making. I wanted to ask you a little bit about the hybrid armor business, it seems to -- in terms of the order pace, to be a little bit lumpy. Is that something that you think is going to be the case for the next 2 or 3 years? Or do you think you're going to get to a point where it's going to be a little bit predictable. And the second part of that question is that you mentioned 25% defense-related revenue. Is that all attributable to hybrid armor, or is there something else going on there? And can you comment on any of that?

Thank you, Patrick, for the question. This is Michael. So the HybridTech Armor orders will be lumpy, which is not great. However, the good side is they're rather significant in [preserve]. By the nature of the industry that we are dealing in, we are still only halfway through our current contract on the HybridTech Armor for the U.S. Navy. And armor itself is kind of -- you get a big order, you work it off, you get towards the end, you get another big order. So the lumpiness, I guess you were referring to, Patrick, is kind of there. And armor predictability will occur once we start transitioning some of these programs that we're working on today, executing with the Navy and some of the ones we're bidding on, which are program of record, awards within the Defense Authorization Act. So that will give us the predictability and visibility into out years of funding.

So we're very quite happy with our armor business and where we're heading, and given that we're in probably year 2 of production now after 5 years or 7 years, if you take the longer view, of R&D starts, we have lots of opportunities, both domestically and international for HybridTech Armor. And they continue, customers and nation states continue to see the value of our product. It's relatively lightweight for a significant kinetic energy threat. It has incredible properties when you get into environmental conditions.

And so we think we've just begun with our armor business. And I like the way it's scaling right now. We're controlling cost as we scale. We have lots of large opportunities, whether they be in the U.S. aviation community, foreign nations and their ground vehicle community. And we already -- you're quite aware of our progress we're making in the U.S. Navy surface fleet.

So yes, we're happy with that. But the lumpiness comes with big lumps. So I think when we look at the business as a mix of product lines performing well, I think in the longer aggregate, it will be just fine.

And in answer to the other question, Patrick, that 25% is not just the Navy contract. That Navy contract is maybe half of it, ballpark.

Got you. That helps. And I can hear the excitement in your voice regarding what it's like and I'm looking forward to maybe mid-deck and where it stands at maybe 50% of your business, but we'll see. We'll see.

The other question I had, if you don't mind, is with respect to your mention of some new customers in RF business. Can we think of that as 5G related? I mean if so, just how significant might that be in terms of maybe percentage of overall revenue out 2 or 3 years?

Well, certainly, as we continue to increase our aerospace product offerings, that has some visibility to us and some we don't have visibility into and what the applications are. I would say it's probably more likely space related. And I don't know specifically, do you, Chuck, of 5G? I don't think so. But it's more of the aerospace side has led us into the RF microwave side.

I have other questions, but I can step aside if there are others on the queue. But if not, I'll throw a couple more at you, if you don't mind.

Go ahead, Patrick. We're here.

Yes.

Okay. Okay. So in the power electronics space, I know you all are particularly suitable to the silicon carbide area, which is, of course, very suitable in the EV space. I understand there's a bit of movement towards GaN in certain aspects of power electronics and even lower voltage applications in transportation, solar, wind. Any thoughts that you can share today as to whether the technology you offer is suitable for more digital in silicon carbide? Does it also work with respect to GaN, which I think generates a little less heat and maybe is a significant -- your technology is more important so (inaudible).

Well, yes, so let me just offer the comment that we're working with a lot of folks in the collaboration of R&D and future EV applications. And you are correct, there are -- there is a technology shift from the silicon die, and that is going on. And there are other applications other than AlSiC that we are actively working. And all of that is working together. And particularly the messaging of this week, it's extremely optimistic for us where the President and the infrastructure folks are talking about renewed interest in domestic production.

So obviously, most of our concern in this market is not that can we do it, it's our competition, and how can we be competitive to close most of those opportunities. And right now, we are doing well with R&D and our customers are inventing different products that are couple of years out, if you will, Patrick, right now, and we are a viable supplier of that.

And so we're interested. I think the high voltage more than low seems to be working for us. But our greatest advantage is with the AlSiC, obviously.

The -- I'm taking it there's other technologies that you're bringing to the table that maybe haven't been announced yet beyond AlSiC?

Correct. And so obviously, we -- at any time -- we're a product-based business, Patrick. So we have different products that are in production. We have products that are in R&D. And a lot of times, the cycles with our customers and partners is kind of close held, and that takes years for them to qualify and get that product going. But these are products that have been studied several years ago and are stepping through the gates by which they become full rate production.

Excellent. Excellent. Can I -- I'm going to keep on going with a couple of more questions if it's okay. One, thinking out maybe 2 or 3 years from now, '24, '25, you're looking to become a midsized company, and I'm not sure what you mean by that. But can you add any color as to what you might be looking for in terms of the model that investors can think about with respect to a handful of things.

One is contribution margins from today going forward and maybe growth rates. And when I mentioned contribution margins, really just distinguish between gross margins, which I see is low 20s, but presumably, your contribution margins might be thought of as something more like 30% or more because you're absorbing -- your fixed cost is already absorbed. So might we be looking at 30% gross margins, maybe a mid-decade if your contributions are -- margins are higher than the gross margins?

Yes. I mean I think that's certainly our goal is to get up to about a 30% gross margin. And we've gone from, I don't know, 20% to 21%, 21%, mid-22% in the fourth quarter, and we're continuing to work towards getting that number even higher. And yes, frankly, 30% is sort of the goal that we're shooting for ultimately. And hopefully, we can get there sooner rather than later. But we think -- speaking for myself on the finance side, this -- the ERP and MRP systems that Michael had mentioned earlier, I think, are going to help us a lot in getting to that place.

And just as a quick check. Patrick, to your point is, obviously, we see there is a relationship between revenue volume, contribution margin. And as I mentioned earlier, one of the reasons we made an investment in an MRP tool is as we continue to grow, we wanted to improve our margin while we're growing. And so you can kind of see, if you will, I don't want to necessarily put a timeline on it, but we are working towards ability to scale the business. And I guess, scale is probably a good way to understand small to medium, the different ways that speak about how we want to grow the business. We don't really quantify it in dollar terms, but we have goals, obviously, year-to-year.

But we know that as we grow, we need to cut and contain and keep our cost down so that as we scale up, our margins improve. And so that is actively what we're working on, and that's what we were trying to share with you about the tools. We basically talk in terms of people, processes and tools, how we can, as we grow the business, scale the business.

Sure. Sure. Is it unfair to ask you -- and I'll ask it anyway, whether it's conceivable that, let's say, with all these initiatives you have in place, that we could be -- it's not undoable to get to 15%, 20% growth rates going out into this mid-decade kind of thing.

That's the goal. That's the goal. I mean, we've achieved 7.5% this year. We have goals of that and greater. But again, we're in a dynamic environment, COVID. Now we have returned to almost Cold War-esque environment. There are some things we can't control, Patrick. But certainly, from a planning standpoint, as a business, we want to grow our business in all of our product lines, all our offerings in depth from early technology levels to full rate production, and that's ongoing. And we think we -- with the addition of this tool, some of the new hires we've had, we are going to put all these pieces in place during '22, and probably give me a quarter or 2, Patrick, and ask the same question, but that's the goal, right?

Well, I think I've done my part, but thanks for letting me ask all these questions. And congrats again on the year. And Michael, you seem to be the right guy at the right time here along with Chuck, and you certainly are in a dynamic space with all that is going on, both with conflicts as well as with power electronics and movement to efficiencies. And so good luck on '22, and I'm sure you'll hear from me again.

Next question from the line of [Anthony Marci].

A couple of questions. To what extent does inorganic growth play into your future? In other words, are there companies out there that you're looking at, or that can hasten your level of revenue or profitability?

Well, this is Michael. Certainly, our -- the base of our plan is canoeing organic growth on the material science line. Are we open for opportunities that are completely aligned with our growth strategy? Yes. Are we actively seeking them? We've made it aware that we are here and we are open. Do we have a committed resources to that? Not full [content]. But I guess we're open, I guess, would be the question for that, but it would have to match with our strategy for growth, right? We've got to be extremely selective because we are having so much success right now. And the history of M&A's success is kind of littered with great successes and great -- not so successes. And so we also want to be sure that we stay, if you will, under our skis as we continue to grow.

Got it.

And we're open for it, but it's not certainly a prime goal for growth. We do think we have lots of opportunities in the way we're configured today.

Right. A couple more questions. The new defense budget, does it hold any -- is there anything in there that would directly benefit you or with any new programs?

Well, certainly, it's a large document. And for the most part, we have 1 component that's not in this year's budget, and we think it's going to be in Palm 24, which is the U.S. Navy's conversion of our HybridTech Armor to surface fleet applications. So that we're cautiously continuing to monitor. But that is -- it takes a while to get into defense budget.

I think for the positive side on the defense budget would be Congress' commitment to fund that small business innovative research program, which is why one of the reasons we've returned to reenergizing our services part of our contract research and development. Congress has firmly stepped up on funding the SBIR, STTR program. We have, obviously, with a few PhDs and material scientists, we have depth and reach to the academic side.

We have a few partners Carnegie, Milligan, University of Arkansas, to name a few, that we work with, MIT. We're obviously companies -- our company is used to working with these academic institutions, and that's a well-funded program in this year's budget. So I think, if anything, you could take away that well-founded congressional research program that is based upon domestic sourcing and commercialization of products is exactly what we do. So that...

Okay. And the final question, given that it sounds like you're predicting or forecasting higher growth, higher -- greater growth, greater profitability this year, what are your IR plans? Obviously, no one follows the -- no sell-side firm follows the stock on a research standpoint. I don't think anyone follows the stock, to my knowledge. What are your plans in terms of just making yourself more visible to the investment community?

It's definitely something that, Anthony, that we're working on. I think we recognize that we can do a better job in that area. And I think that it's something that going forward, it's probably something that we'll be addressing sooner rather than later to do a better -- well, we will be addressing it to do a better job. And I think that it will be something that you guys can see as we move ahead in 2020.

Yes. And certainly, just to follow up on Chuck's comment, we did have a short list of 4 this year. And like our trade shows, Anthony, we're getting -- not that we don't want to go in a 10, but I don't know how it is in your industry, in particular, but conferences aren't greatly attended yet with COVID. And so we're not very sure that the conference is going to happen and -- but we are -- we have a list of 4 conferences that we're trying to get to. And so we've targeted them and I think we're working towards that. I think in the past, Grant and Chuck, our predecessors [have potential], and we're trying to get back to that.

Well, I guess I was referring to -- I mean, are you referring to investment conferences or trade conferences? Because the investment conferences just now are beginning to go back to attendance, but there's a lot -- there are a lot of conferences that are done, even today, virtually, which I think would -- my suggestion would be to try at least once every several months or 3 months, do an investor conference virtually, so at least you're getting the word out.

Yes, I think it's a great idea.

Okay. Are you currently employing outside IR firm? Or is it just purely internal at this point?

At this point, it's purely internal.

Next question from the line of Lenny Dunn.

Congratulations on the way you're running the business. And I'm going to address the dilemma that we have a large investor in your firm. I completely understand that you can't disclose defense contracts that are proprietary. I also understand that you can't get give a lot of guidance because a lot of the contracts you have, you're the subcontractor on and you can't antagonize the people that give you the contract. And so it leaves us kind of in a dilemma as investors because we really can't get our arms around totally on what's going on. And I understand the reasons why you can't do those things. But are there some things that you can do to give us at least some forward guidance in broad terms without being specific and -- so that we have a little better handle on what we own? Hello?

Yes, we're here.

Well, I think -- this is Michael, and thank you for the comments. We certainly would endeavor to get to that point, but we're not there. We're sharing with you the most we feel comfortable with sharing. We're trying to improve our communications with all of our investors about how we think the future is going to be, how much more can we tell you as far as guidance, I guess. That's kind of far for us right now, if you will.

But right now, we are trying to walk a line here, right? We have customers -- to your point, we have customers that don't want us to disclose things. We have competition, we have pandemics, we have war. We have lots of things we don't control. The things we do control, we don't see enough of to, I think, change decades of the way we've been reporting the business. But we try to share as much as we can, I guess. It's the best I can share with you right now.

Well, I was encouraged by...

And you're welcome to visit at any -- we welcome you to come and visit. I mean we can figure that out offline, and we could show you more.

Well, a couple of problems, number one, the last week or so, I've been in the hospital, I guess, I'm recovering from COVID, so I can't come visit. But that being said, I'm very encouraged by what I saw with the options exercised from insiders. So obviously, you're sending us a message that you certainly believe that everything is going to be very good going forward or that wouldn't have happened. But just -- it's very hard to evaluate. We're certainly not -- I'm not discouraged at all, long-term holder, may continue to add. But I just wish we had a little better way of understanding where we're going, going forward. So I don't know what effort you can make to at least disclose a little more and give us at least a better feeling of what we own as owners.

Yes. I think certainly, we'll continue to -- as you know, in the past, we've -- if we get major contracts that allow us to announce, we're certainly going to announce those kinds of things. And we talked a little bit about -- I think it was in December with our bookings, our sales bookings for the year, we're double what 2020 and 2019 were. So those kinds of things, obviously, will continue to do as much as possible.

Okay. Well, I've asked and whatever you can do to help a little, would be very much appreciated.

There are no further questions at this time. Please continue.

I think that's it.

Well, if that's it, Chuck, I think on behalf of Chuck and I, thank you, everybody, this afternoon for your time. Hopefully, you feel like we feel that the business is doing well. And obviously, Lenny pointed out that Chuck and I have showed it in. We believe it is a good business. And we look forward to talking to you guys more and welcome the feedback. Thank you very much. Have a great day.

Thank you, everybody.

That concludes today's conference. Thank you, everyone, for participating. You may now all disconnect.